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Indonesian insurance companies inaugurated Friday an
arbitration body to settle disputes with policy-holders and bypass the
country's slow and questionable legal system.
The Indonesian Insurance Mediation Body (BMAI) set up by the federation
of the associations of life and general insurance companies will begin
operations next week.
"The BMAI is a kind of arbitration body for handling insurance-related
disputes, which is established as a reaction to unsatisfactory legal
verdicts that usually place companies at the losing end," said the
chairman of the newly established body, Arizal ER. "The decisions made
by the body will be legally binding," he said.
To give the best services, Arizal said he had consulted with insurance
mediation bodies in Malaysia and Thailand and conducted numerous
studies with them.
"In terms of services, we are prepared with the best standard operating
produces, skilled professionals and a high standard of information
technology," he said.
One of the services provided by the body is a 24-hour customer
complaints procedure, which can be made through the Internet.
"In the past, there were many insurance claim disputes that were not
handled properly. I hope that the BMAI can provide fair settlements to
claims disputes and give more security to all stakeholders in the
insurance industry," Capital Market Supervisory Agency (Bapepam)
chairman Fuad Rachmani said.
Faud officially launched the body on the behalf of the government.
He said the country's legal system had not provided fair verdicts in
claim disputes.
"Our judicial system has been very weak. People tend to feel unsafe
starting up a business. They are scared because everything is unclear
and this could cause them huge losses later on," Fuad said.
Indonesian Insurance Association chairman Ahmad Subianto said the
establishment of the body was a milestone for the industry in Indonesia.
"Insurance disputes must be settled under the customs of the insurance
industry," he said.
Customer trust drove the industry and although the body was funded by
insurance companies, Fuad said would be independent, just and fair.
A monitoring body, the supervisory board of the arbitration body
(BPBMAI) has also been established, headed by five association
officials and four academics.
"The (BMAI) has to be monitored so that it will not be conterproductive
to the growth of the industry," BPBMAI chairman Isa Rachmatarwata said.
Isa said his team of nine would not "interfere" with cases being
handled by the body. However, it would ensure all activities were
carried out under standard operating procedures, he said.
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